Investing.com — Oil prices surged on Monday after President Donald Trump rejected Iran’s latest response to a U.S. peace proposal as “totally unacceptable,” pushing U.S. airline stocks lower in premarket trading as investors weighed the prospect of a prolonged supply disruption.

climbed 2.7%, to $104.02 a barrel at 05:14 ET (09:14 GMT), while rose 2.3%, to $97.55 a barrel. The Strait of Hormuz remained largely closed, keeping global supply tight.

As a result, shares in and fell 1% in premarket trading, while and edged lower 0.8% each. 

The jump in oil prices reversed much of last week’s losses, when both contracts shed around 6% on expectations that the 10-week-old conflict could be nearing a resolution and oil shipments through the strait would soon resume.

Those hopes faded after Iran released its counter-proposal on Sunday, which went well beyond the narrow ceasefire framework the U.S. had put forward. Tehran called for a broader end to fighting across the region, including in Lebanon, where U.S. ally Israel is engaged with Iran-backed Hezbollah.

Iran also demanded compensation for war damage, an end to the U.S. naval blockade, guarantees against further strikes, sanctions relief, and the lifting of a ban on Iranian oil exports, according to Iranian state media and the semi-official Tasnim news agency. Tehran also emphasized its sovereignty over the Strait of Hormuz.

Trump dismissed the proposal promptly. “I don’t like it — TOTALLY UNACCEPTABLE,” he wrote on Truth Social. 

Washington had originally proposed halting the fighting before moving to more complex issues, including Iran’s nuclear program.